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Competition Policy in Action! EU looks to curb the power of big tech firms

Graham Watson

7th September 2023

It looks like the EU is looking to curb the market power of big tech firms via its new Digital Markets Act, that is seeking to increase competition in the sector. One way of doing this is to give consumers greater choice over the apps on their phones, and allowing them to delete pre-installed apps.

Initially, the article notes that six firms are in the firing line: "Alphabet (which owns Google), Amazon, Apple, ByteDance (the owner of TikTok), Meta (Facebook, Instagram and WhatsApp) and Microsoft.

The EU has been scrutinizing the market power of big tech firms for a few key reasons:

  • Antitrust concerns: Some critics argue that big tech firms like Google and Facebook have used their market dominance to unfairly squash competition, which could lead to higher prices and less innovation for consumers.
  • Data privacy and protection: There's also concern about how tech giants are using consumers' personal data, and whether they're handling it responsibly and transparently.
  • Impact on small businesses: There’s concern that tech giants are using their scale and market power to squeeze out smaller businesses, particularly in the e-commerce space.
  • Taxation: Some EU officials argue that big tech companies aren't paying their fair share of taxes, and that they're using complex tax structures and loopholes to avoid paying taxes in the countries where they're operating.

The EU has a few options, and they’re definitely not messing around. Here are some of the potential measures they're considering:

  • Anti-trust action: Breaking up big tech companies or limiting their ability to buy up smaller rivals.
  • Data protection laws: Strengthening regulations around data privacy and giving consumers more control over how their personal data is used.
  • Tax reform: Closing tax loopholes and introducing a digital services tax to make sure big tech firms pay their fair share.

Graham Watson

Graham Watson has taught Economics for over twenty years. He contributes to tutor2u, reads voraciously and is interested in all aspects of Teaching and Learning.

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